Daily Development for Thursday, October 17, 2002
By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of
Of Counsel: Blackwell Sanders Peper Martin
Kansas City,
prandolph@cctr.umkc.edu
LANDLORD/TENANT; LANDLORD'S REMEDIES; DAMAGES; HOLDOVER: The statutory doubled rent for holdover
tenancies is owed only until the tenant vacates the premises, not until the end
of the calendar month.
Lorril Company v. LaCorte, 352 N.J. Super.
433, 800 A.2d 245 (App. Div. 2002).
A residential lease commencing on the first of the month
allowed either party to terminate the lease upon two months' written
notice. The tenant provided that notice,
after it sent the notice, the tenant sent a second
letter asking to stay an additional month because it believed that the house
that it was building would not be ready for occupancy. When that date came, the tenant still wasn't
ready to move and couldn't provide a firm date.
Forty-five days after the extended termination date, the
tenant actually departed on July 15. The
landlord re-entered the apartment without a court order or permission and began
to remove various appliances from the premises.
Landlord then sued to recover its rent, including double rent for the
holdover period. The tenant
counter-claimed alleging wrongful entry and demanding return of its security
deposit. The tenant's wrongful entry
argument was that its holdover established occupancy rights through the end of
July, and that landlord violated those rights when it asserted possession of
the property without an eviction action.
Ironically, Tenant had not paid rent for the last two
months. Further, landlord needed an
additional month after the tenant vacated before it could relet
the premises and begin to collect rent.
The lower court held that "if a tenant does give notice to move out
and then does not comply with it, they are liable [for] double the rent." The lower court also found that there was a wrongful
entry, but declined to award damages for the wrongful entry. As to the tenant's security deposit, the
lower court found that the landlord had failed to send proper notice regarding
return of the security deposit and held that, in such a case, the Court would
"double the entire amount of the security deposit," then allow
deductions from that, "but you double the entire amount first."
The Appellate Division saw the matter differently. It pointed to
N.J.S.A. 2A:42-5 which provides that "[i]f
a tenant ... shall give notice of his intention to quit the premises ... and
shall not deliver up the possession of such real estate at the time specified
in the notice, such tenant space... shall, from such time, pay his landlord ...
double the rent which he should otherwise have paid." The statute further provides that
"double rent shall continue to be paid during all of the time such tenant
shall continue in possession after the giving of such notice."
Here, the tenant left in the middle of the month and because
the lease required rent to be paid on the first of each month, the court agreed
with the tenant that "the tenant[] [was]
technically entitled to occupancy for the entire month... ." That is the reason why the lower court
doubled the rent due for two full months.
According to the Appellate Division, however, this calculation was in
error because the statute itself "indicates that double rent shall be paid
only for the period the tenant continues 'in possession.'" As a statute that is penal in nature, the
holdover statute must be strictly construed.
The tenant was liable for the original rent for the entire month, but
was liable for double rent only for the actual period that it occupied the
premises.
The Court believed that the legislative intent was to end
the "doubling" when a tenant actually vacates its premises. While the Court did not believe that the
statute was perfectly clear, it felt that the proper interpretation of the
expression "in possession" was to be measured by the date the tenant
moved out, not by the date to which rent should have been paid or for as long
as the tenant was entitled to occupy the apartment. "Because the statutory goal is to
encourage the tenant to move as quickly as possible after the specified 'moveout' date passes, the Legislature imposes double rent
for each day thereafter the tenant remains in the premises." If the tenant were charged for the entire
period that it was entitled to occupancy, "there would little incentive
for the tenant to vacate the premises as soon as possible...
."
As to the manner in which the lower court calculated the
handling of the security deposit, the Appellate Division pointed out that money
owed by a tenant must first be deducted from the security deposit and only
then, if there is any security deposit left, should the court double the
remaining amount. Here, the tenant owed
more money than the landlord held as security deposit. There was no need to double the security
deposit or to double any non-existent "excess."
Comment: There are
some analytic disconnects here. The
court is quite vague about whether there was indeed an unlawful entry, but it
does say that the Tenant had the right to possession for the balance of July. If the landlord indeed had not reentered the
premises until the end of July, would the tenant have been liable for double
rent for the entire month?
The court's analysis unnecessarily makes this question very
unclear.
But it does seem absolutely clear that the double rent is payable only for periods of actual occupancy. Since the landlord retook possession of the premises, lawfully or not, on July 15, no double rent could be recovered beyond that point.
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argue with the daily development or the editor's comments about it.
Items in the Daily Development section
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